The R&D tax incentive is a highly successful policy programme has helped many Australian biotechnology and medical technology businesses to undertake additional R&D activities and to successfully create innovative health care products for the global export market.
The BioMelbourne Network has already made contributions to the 2014 Senate Inquiry into Australia’s Innovation System and the 2014 Inquiry into Tax and Superannuation Laws Amendment (2014 Measures No. 5) Bill with recommendations directly regarding the R&D Tax Incentive.
In order to add further value to the current review of the R&D Tax Incentive, the BioMelbourne Network surveyed business members to gain additional evidence and commentary to support and inform the work of the Review Panel. The findings of the “BioMelbourne Network Member Survey 2016: The role of the R&D Tax Incentive in the health innovation ecosystem” are attached here and we volunteered to provide further information and to discuss our findings with the panel.
Top 5 key points:
• R&D Tax Incentive provides significant support that enables businesses to undertake, develop and extend their R&D activities that would not be possible in the absence of the R&D Tax Incentive.
• The result of the R&D Incentive is that Australian companies retain their ownership of intellectual property of significantly greater value and across multiple programs than would have been the case if they did not have access to this programme.
• The R&D tax incentive is a significant factor in maintaining Australia’s competitiveness as a preferred location for R&D activities, such as pre-clinical testing and clinical trials. Biotechnology and medical technology are global industries, and Australia must compete to retain the R&D activity of local companies, as well as attracting international R&D activity into Australia.
• The R&D Tax Incentive provides spillover benefits into the health system by providing Australians with access to early stage therapeutics, diagnostics and medical devices during clinical trials.
• In order to incentivise innovation and R&D it is critical to maintain a stable supportive policy environment to provide businesses with a consistent framework in which make strategic decisions around R&D activity.
Recommendation: Maintain a consistent and supportive policy environment that incentivises R&D and innovation by avoiding any unnecessary changes to the R&D Tax Incentive that would be detrimental to the R&D activities of biotechnology and medical technology companies in Australia.
Australia has a huge opportunity to build from our strong foundation of health and medical research and globally competitive R&D capabilities to lead the global transformation of healthcare. Our spirited biotech and medtech entrepreneurs are engaged in R&D, innovation and commercialisation activities that seek to transform Australia’s ideas and discoveries into valuable products and services that benefit patients and create better health.
Alterations to the R&D tax initiative could create a barrier to achieving this vision for the future of Australia. I will leave you with to reflect on the responses of BioMelbourne Network.
In addition to an independent submission, the BMN also contributed to a joint submission in collaboration with other industry bodies. To read the joint submission, click here.